Retracement to Prior Demand Week (PDW)
Note: The historical stock examples given below are for EDUCATIONAL USE ONLY. They ARE NOT to be used to make buy/sell decisions in today's market. For more information, please read the HSR Terms of Use.
Description
A stock corrects in price, but finds support when it reaches a price range from its prior uptrend that featured heavy accumulation.
This price range is known as a Prior Demand Week (PDW) because it represents a zone of past demand (accumulation) from the weekly chart.
Behavior Note: Prior Demand Weeks are often selected from thrusting price bars because thrusting indicates excessive demand/eagerness of buyers.
What you need to know
A Prior Demand Week may provide support during corrections because institutional investors may defend (buy more stock) their stock holdings at price levels where they previously bought large amounts of stock.
Identifying a PDW may help you anticipate where a stock may bottom and begin to form the right-hand side of its base.
You can also use the concept of a PDW on daily and monthly charts that feature price thrusting.
Historical Stock Chart Examples 1A-1C: Diamond Offshore Drilling (DO) 2004
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Click to enlarge 1A
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Click to enlarge 1B
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Click to enlarge 1C
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Please >>CLICK HERE<< to go to the next price behavior within Base Behaviors.
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